Pontiac's Workforce Is Cut 86% as Michigan Makes City Obsolete

By Chris Christoff -
Nov 28, 2012

In five years Pontiac, Michigan, has
seen its workforce slashed to 76 from about 570, its police and
fire departments handed to surrounding communities and
contractors hired for services such as building inspections and
cemetery maintenance.

State-appointed emergency managers are making traditional
government obsolete in a city of 59,000 where Pontiac cars once
were made, professional football and basketball were played and
where tax revenue fell 40 percent in the past four years.

Plagued by deficits and under state control since 2009,
Pontiac’s situation has prompted a debate over whether a city is
defined by its government and workers. To opponents of state
intervention, it’s where democracy died and a civic identity was
stolen.

“City Hall is like a ghost town,” said Ken Corr, 62, a
lifelong resident and poet laureate of the town 15 miles (24
kilometers) north of Detroit. “We used to come here to pay our
water bills, pay utility bills. It was a place you could count
on seeing people you hadn’t seen for a time.

‘‘It’s just a different community than we’ve known.”

Across America, states such as Ohio, New Jersey and
Michigan have pushed school districts and local governments,
each with its own officials and budgets, to share services and
consolidate for the sake of efficiency and cost. Michigan alone
has 533 cities and villages, 1,240 townships and 83 counties,
said Samantha Harkins, director of state affairs for the
Michigan Municipal League.

Existential Dilemma

Paul Tait, executive director of the Southeast Michigan
Council of Governments, said they must cooperate to survive, and
that Pontiac has gone further than any city in the state.

“You reach a point where to continue as a government
entity, you have to go to that next level to maintain core
services,” Tait said.

Many voters aren’t happy with that level.

Pontiac’s diminishment happened thanks to a 2011 law known
as Public Act 4 that let emergency managers fire people, sell
assets and cancel union contracts. It was one of five cities
under state control when voters repealed the law Nov. 6 amid a
union-led campaign that called it undemocratic and meant to
destroy them. Since then, the state’s weaker, 1990 emergency
manager law has also been challenged in court.

Louis Schimmel, 75, is Pontiac’s third emergency manager, a
retired municipal-bond adviser who’s helped three other Michigan
cities regain financial footing. He was appointed in September
2011 by Republican Governor Rick Snyder to run Pontiac, with a
$150,000 salary.

Selling Pontiac

Schimmel this year sold the city’s sewage-treatment system
to surrounding Oakland County for $55 million. He used $32.2
million to pay off debt and the rest to balance this year’s
budget. Still, the city faces a $6 million deficit next year,
Schimmel said.

In the past 18 months, Schimmel and his predecessor,
Michael Stampfler, disbanded Pontiac’s police and fire
departments and contracted with the Oakland County Sheriff’s
Department and neighboring Waterford Township’s fire department
for protection. Both hired Pontiac’s police officers and
firefighters, and both operate out of facilities in the city.

Pontiac is saving about $5 million a year, Schimmel said.

“I’m trying to show this for the rich cities as well as
the poor cities,” Schimmel said. “It makes no sense to have 28
police departments in the county. One works just fine. It works
better than all these ragtag ones.”

Yet in November, Pontiac voters rejected the emergency
manager law by a 3-1 ratio.

Identity Crisis

Emergency managers create a “horrible” loss of self-
governance, said Steve Manning, 69, a former Pontiac community-
development director and chief of staff to a previous mayor.

“You call City Hall with a question, and it’s rare that
you get a human voice,” he said in an interview in downtown
Pontiac.

Manning said the city failed to cut a bloated workforce
after General Motors Co. (GM) began closing plants. Yet the city
could have resolved its deficit alone, he said.

“I don’t think what took 40 years to create you can fix in
18 months,” Manning said.

Manning echoed a common complaint: Pontiac’s first
emergency manager, Ed Leeb, in 2009 sold the vacant Silverdome
stadium for $583,000, a fraction of the $56 million spent to
build the former home of the Detroit Lions National Football
League team, where Super Bowl XVI was held in 1982.

Plans for a casino or professional soccer team in the
stadium fell through.

“Their philosophy is come in, sell all the jewels to pay
the bills, and next year those bills come up and we’ve got
nothing left to sell,” Manning said of emergency managers.

‘Martial Law’

City Councilwoman Mary Pietila said the state takeover
usurps Pontiac voters’ rights.

“We’re still under martial law,” she said. “They still
have taken the rights of the voters away, because we have no
say.”

Supporters say the takeover has brought demonstrably good
results.

Police response time dropped to under 10 minutes from 76
after the department was dissolved, said Oakland County
Undersheriff Mike McCabe. The county hired 63 former Pontiac
officers and added 11 deputies to patrol the city, McCabe said.

Savings result from cheaper benefits packages. Former
Pontiac officers got pay raises when they transferred to the
sheriff’s department, but their benefits were 64 percent of
wages compared with 114 percent before, McCabe said.

Diminished Mayor

“A lot of people, as their budgets get tighter and they
start having more problems, are going to look to what has
happened in Pontiac as a possible road map,” said Mayor Leon Jukowski. Under emergency management, he kept his title but lost
his authority. He works as a consultant to Schimmel for $50,000
a year, half his mayoral pay.

The loss of manufacturing began Pontiac’s decline. In the
late 1960s, General Motors factories there employed almost
37,000, according to company documents. An assembly plant for
Pontiac cars closed in 1988 and, in 2009, a truck plant was
shuttered.

There remains a GM metal-stamping facility with about 350
workers, and a research center with some 3,000. In 2009, amid
the auto industry’s financial crisis, GM decided to end the
Pontiac line, which had existed since 1926.

“I never thought I’d see a day when a Pontiac wasn’t made
in Pontiac,” said Manning, the former city official.

Schimmel said the reduced Pontiac should be a model.

“I’m trying to be the example for all of Michigan, for any
municipality anywhere,” he said. “Before you put your hand out
and ask for more money to continue to subsidize a totally
mismanaged town, you need to clean up your own act first.”